5 ways in which your credit card ruins your finances
You may want to jump in some of these cases.
In addition to all the convenience they provide, credit cards can always lead to disastrous financial situations if you are not careful. Certain expenses may lead to interest in accumulation on missed or spread payments or damage your credit scoring long-term. But even on a buying basis for purchase, choosing to slip or type could create more immediate money problems you would like to avoid.
"There is a saying that credit cards are like electrical tools: they can be really useful, or they can be dangerous. It all depends on how you use them," said Ted Rossman ,, Senior industry analyst in Bankrate.
So what should you do differently? Read the rest for the way your credit card ruins your finances, according to experts.
Read this then: Never use automatically for these 6 invoices, according to financial experts .
1 When you pay more due to merchant costs.
Being able to slip or type to pay can be a major convenience. But when a merchant accepts credit cards as payment of the goods and services they sell, they incorporate treatment costs for the credit card network on each customer transaction. And while many traders accept this as a cost to do business, many choose to send you directly to you via a supplement of your total payment, says Riley Adams ,, Founder and CEO from WealthUp.com.
"For example, if you make a purchase of $ 1,000 with a credit card in a company that requires an additional 4%, you will end up paying additional $ 40," he said. "You stick with this supplement maintains their whole beneficiary margins and you are less bad. In cases like this, it is generally more logical to pay with another means of payment if you are available."
In relation: Never use your debit card for these 6 purchases, according to financial experts .
2 When you use the bad reward card or pay too much in annual costs.
Credit cards have the advantage of winning rewards, even if you simply use them on essential purchases and monthly invoices. However, experts warn that you could miss them if you are not registered with the right ones.
"Although using a money back card is excellent, you want to make sure it works harder for you by rewarding yourself for the types of purchases you make the most or the stores you buy at maximum, "explains consumer savings and smart shopping expert Andrea Woroch . "So look at your expenses in the past few months to determine where you spend the most and find a money backup card that gives you more in this category of expenses."
According to Rossman, this also explains how much it costs to keep the card open every year. "The annual costs could be worth it, depending on how you use the card, including precious advantages such as access to airport fairs, free stays, best rewards and credits for raceshares, delivery of food And retail memberships. But by paying annual costs for a card would be a mistake when you do not take advantage of enough advantages to justify it. "
Read this then: Always use money for these 5 purchases, say financial experts .
3 When someone else recklessly uses it.
Staying informed of the amount of scanning can be difficult, but it is even more difficult when you share your account with someone who spends a little more random. And in many cases, it could mean cutting the others before things become uncontrollable. AE0FCC31AE342FD3A1346EBB1F342FCB
"Authorize an authorized co -signer or user who is not financially responsible for using your card and invoice more than you can pay can become ruinous," explains Bill Hardekopf , an expert in financial literacy and author of The complete guide of the credit card . "Since this is your account, you will be held responsible for their costs."
4 When you use it to pay your taxes.
Determining with precision what you need to IRS each year can be a test in itself. But when the time comes to settle, you may want to leave your plastic in your wallet.
"When faced with substantial responsibility such as taxes, the temptation to put it on a credit card may occur," said William Bevins , a private wealth manager at Cypress Capital . "Do not forget that the processor generally applies additional costs of approximately 2 to 2.75% on your planned payment. You have the possibility of establishing a payment plan with the IRS, which is delivered with a rate of 'more favorable interest. "
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5 When you use it to fill in the pump.
A pump trip may seem more expensive than ever, but that does not mean that there is no way to save a little money. And according to experts, one of these methods is to avoid a blow or a tap.
"Do not leave the gas price panels you are wrong: if you pay by credit card, you will need to deposit 10 cents by Gallon in many cases," warns Woroch. "Consider paying cash when possible or use an application to find a cheaper service station to compensate for these additional costs."
Do you want to save money without all trips to the automatic counter? Consider looking for a credit card that can actually you save money on gas purchases .
Best Life offers the most up -to -date financial information for high -level experts and latest news and research, but our content is not supposed to replace professional advice. Regarding the money you spend, save or invest, always consult your financial advisor directly.
